Canada’s Environment and Climate Change Minister, Steven Guilbeault, today announced the release of the final Clean Fuel Regulations, which will impose increasingly stringent requirements on producers and importers to reduce carbon content in gasoline and diesel.
When fully implemented, these regulations will help offset up to 26.6 million tonnes of greenhouse gases in 2030, according to the government, which is approximately the amount of GHGs that all of the Canadian economy produces in two weeks.
“The Regulations were designed to avoid immediate impacts on the cost of fuel. Moreover, it comes as gasoline refining margins in Canada increased by more than 113% between June 2019 and June 2022, and oil and gas companies report record cash flow. In this context, it would be opportune for the industry to invest in new clean technologies,” the statement read.
Price increase to be expected
Avoid immediate impact on the cost of fuel? That remains to be seen. And in the long term, gasoline and diesel are likely to cost motorists more.
According to an impact study cited by the Canadian Press, refiners and other fuel suppliers will have to spend between $22.6 billion and $46.6 billion to comply. Canada’s GDP will be affected by approximately $9 billion and pump prices will rise by 6 to 13 cents per liter in 2030.
This could represent an additional annual cost of $76 to $174 per vehicle, or up to $301 per household.
The study says there will be a disproportionate impact on low-income families and older drivers, among others, who are more affected by fluctuations in energy costs and are less likely to be able to afford alternatives like an electric vehicle.